GA Real Estate 5 Glossary

One authorized to transact all of the principal's affairs within the context of a broad commercial or other kind of endeavor. Property manager.

General Agent

A lien that attaches to all property owned by an individual. Real and personal.

General Lien

Contains covenants in which the grantor formally guarantees that good and marketable title is being conveyed. Highest deed - 5 covenants.

General Warranty Deed

Commonly known as "Ginnie Mae," this agency of HUD operates in the secondary mortgage market. It is involved with special government financing programs.

Government National Mortgage Association (GNMA):

This lease provides for periodic step increases in the rental payments

Graduated Lease Provisions

A financing technique for residential real estate in which monthly payments start at a lower rate and increase periodically over the life of the mortgage; FHA 245.

Graduated Payment Mortgage (GPM)

Purchaser or donee receiving title to property.

Grantee

Owner making conveyance of title or interest in property.

Grantor

The actual income received from property before the deduction for any expenses

Gross Income

A method of appraising income-producing property based on a multiple of the annual gross income; also called a gross rent multiplier.

Gross Income Multiplier (GIM):

A method of appraising single family or duplexes based on the monthly gross income.

Gross Rent Multiplier (GRM):

That part of a deed beginning with the words, "To have and to hold", followed by the granting clause and reaffirming the extent of ownership that the grantor is transferring. The habendum clause defines or limits the extent of ownership in the estate granted as, for example, a fee simple, life estata or easement: "To have and to hold unto said Sally Smith, grantee, a life estate in the following property"

Habendum clause

The legal use of a parcel of land, which when capitalized, will generate the greatest net present value of income. The first thing an appraiser should determine.

Highest and Best Use

An agency of the federal government which oversees many federal housing programs

Housing and Urban Development (HUD)

process of pledging something (house) as security, but retaining possession of it.

Hypothecate

Incapable of being moved; fixed in location, such as land.

Immobility

contract formed through the acts or conduct of the parties. involved.(Ostensible)

Implied Contract

A traditional means of appraising property based on the assumption that value is equal to the present worth of future rights to income.

Income Approach

This economic principle states that the addition of more factors of production will add higher amounts to new income up to a certain point, which is the point where the maximum value of the asset has been reached; any further addition of factors of production will do nothing to increase the value.

Increasing and Decreasing Returns

Elements of a structure which are neither physically possible nor economically feasible to correct.

Incurable Depreciation

The rental is tied to some commonly agreed to price index such as the Consumer Price Index or the Wholesale Price Index.

Index Lease

1) the sum paid for the use of money (2) the degree of rights in the ownership of land.

Interest

Dying without a will.

Intestate

A form of concurrent ownership, which occurs when two or more persons own a single estate in land, with right of survivorship. Must have equal shares, right to partition

Joint Tenancy

The charge upon the land of a debtor, resulting from the decree of a court, entered in the judgment docket. Lawsuit

Judgment Lien

An encumbrance, second in priority, to a previously recorded lien or to a lien to which the encumbrance has been subordinated.

Junior Lien

The seller accepts a down payment on a parcel of land but title to the property does not pass until the last principal payment has been received. This is referred to as an installment sales contract or a contract for a deed.

Land Contract

A defect which cannot be discovered by ordinary inspection.

Latent Defect

The interest that the tenant has created by a lease.

Leasehold

A written description of a parcel of land which locates it precisely and will hold up in court. (Does not include address.)

Legal Description

Estates in possession generally referred to as leaseholds. Considered to exist for a definite period of time, or successive periods, of time until terminated by notice; also know as non-freehold estates.

Less than Freehold Estate

Tenant.

Lessee

Landlord.

Lessor

Using borrowed capital to finance the purchase of real estate or other assets. (No money down)

Leverage

A personal privilege to go upon the land of another; not considered an interest in land. Permission only to use.

License

A legally recognized right to enforce a claim or charge on the property of another for payment of some debt, duty or obligation.

Lien

The mortgage merely creates a lien right on the mortgagee with the mortgagor retaining the title.

Lien Theory State

An interest which only lasts for the term of a life, or lives, of one or more persons. Death terminates

Life Estate

A life estate in one person with another person serving as the measuring life.

Life Estate Pur Autre Vie

The holder of a life estate.

Life Tenant

An entity with one or more general partners and one or more passive investors, called limited partners

Limited Partnership

An agreed-to sum, which will be paid if the contract is breached.

Liquidated Damages

A notice filed for he purpose of serving constructive notice that title, or some matter involving particular real property, is in litigation.

Lis Pendens

An employment agreement between an owner and broker defining the duties and rights of both parties. (Unilateral contract)

Listing Contract

The relationship between the amount borrowed and the appraised value of the property. (Purchase price 100,000-Loan 80,000-LTV 80%)

Loan-to-Value Ratio

A method of land description frequently used after land has been subdivided into building lots; also referred to as the recorded plat method. (Must have a plat map to find the property)

Lot and Block

The duty owed by an agent, to avoid conflicts of interest or any activity which is detrimental to a principal.

Loyalty

An employment contract between the owner of real estate and a property management firm that agrees to oversee the management of the property

Management Agreement

economic function of bringing buyers and sellers together through the price mechanism.

Market

A means of estimating value by comparing similar properties. Used when there is an active market and where comparables can be identified. Also called comparable sales approach.

Market Data Approach

The price at which a willing buyer and a willing seller will agree upon, where neither is under any undue pressure, and both are negotiating at arms length with complete knowledge of the market.

Market Value

One which is free from reasonable doubts or objections, and which the courts would compel a purchaser to accept under the terms of a sales contract.

Marketable Title

A program for the future development of a community which serves as the guideline for capital expenditures.

Master Plan

A method of land description which involves identifying distances and directions and makes use of both the physical boundaries and measurements of the land.

Metes and Bounds

A mill is equal to one-tenth of one cent and is used to state the property tax rate. (.001)

Mill

A tax rate stated in tenths of a cent. For example, a millage rate of 150 mills on property assessed at $100,000 would result in a property tax of$1,500 ($100,000 x .150).

Millage Rate

An infant; one who has not attained majority in a state and does not have legal capacity to be bound by most contracts. (Voidable contracts)

Minor

An innocent or negligent mis-statement of a material fact, detrimentally relied upon by the other party.

Misrepresentation

A lease which has a term of one month but renewable for successive months at the option of both parties.

Month-to-Month Tenancy

Physical evidence of a point- of- beginning established by surveyors for use in locating parcels of land.

Monument

A legal document used to secure the performance of an obligation, in which the borrower or mortgagor agrees to pledge property to secure the debt represented by the promissory note. (A contract).

Mortgage

The broker agrees to sell the property in order to achieve a net price to the owner, and anything which is received above the net price is the broker's commission. A net listing is prohibited by the licensing law in many states.

Net Listing

A pre-existing use of land which does not conform to the zoning ordinance but which may legally remain.

Nonconforming Use

A signed instrument acknowledging the existence of a debt and the promise to pay.

Note

Occurs when the person in a contract, to whom the duty was owed, expressly agrees to substitute the delegate, or new obligor, for a consideration, and agrees to discharge the old obligor from the obligations under the contract. For example, loan assumptions

Novation

Invalid and unenforceable.

Null and Void

A loss in value due to reduced desirability and usefulness of a structure because its design and construction have become obsolete. A loss due to a structure’s becoming old fashion, not in keeping with today’s standards or needs, with consequential loss of income

Obsolescence

The necessary elements of mutual assent; for example, an agreement of one party to buy and another party to sell.

Offer and Acceptance

An agreement between an owner and many brokers. If a broker produces a ready willing, and able buyer, a commission is due. However, the owner still has the right to sell his/her property and is not obligated to pay a commission to anyone.

Open Listing

A loan containing a clause which allows the mortgagor to borrow additional money without rewriting the mortgage.

Open-end Mortgage

A right which is given for consideration to a party (optionee) by a property owner (optionor) to purchase or lease property within a specified time, at a specified price and terms. An option is irrevocable by the optionee and will not be extinguished by death or insanity of either party

Option

The holder of the option. Buyer

Optionee

The seller of the option.

Optionor

A statute enacted by the legislative branch of a local government

Ordinance

A policy insuring the owner of real estate against certain defects of title